badvr: Building a VC-Independent Business with Government Grants

When the Los Angeles-based extended reality data visualization firm BadVR learned of significant restructuring, including job cuts of 1,000 employees, at one of its initial supporters, Magic Leap, the young company remained confident.

Although BadVR had clear connections to Magic Leap as an enterprise application featured on the platform, the startup was less affected by the shift away from consumer-oriented applications than many other businesses.

Securing funding through the government’s Paycheck Protection Program was the initial step, allowing the company to maintain its workforce and bolster its capital. Subsequently, BadVR successfully obtained an additional $1 million grant from the National Science Foundation.

This represents the second grant received from the NSF, demonstrating how startups can utilize government funding as a capital source and potentially circumvent some of the challenges associated with venture capital fundraising.

Even the difficulties faced by Magic Leap would not have significantly impacted BadVR, which specializes in enterprise applications for extended reality devices.

The situation with Magic Leap illustrates that achieving success doesn’t necessarily require venture capital. With decreasing equipment costs and the increasing accessibility of engineering talent through remote work, startups can acquire necessary capital through government funding and corporate innovation grants.

BadVR has secured the majority of its $3.5 million in funding through these avenues, with some originating from grants and at least $1.25 million coming from the government via two National Science Foundation cooperative agreements through the Small Business Innovation Research program.

BadVR employs virtual and augmented reality technologies to visualize geospatial data for diverse government and commercial applications. The company’s technology is currently utilized by major telecommunications companies to expedite the planning and implementation of 5G networks. Furthermore, within the public safety sector, its solutions enhance situational awareness for first responders and reduce expenses related to training, staffing, and operations.

“In today’s world, we recognize the significance of data and its influence on our lives. It is essential to ensure that data access is straightforward for all organizations, regardless of their technical expertise or background,” stated Suzanne Borders, CEO and founder of BadVR, in a recent announcement. 

Borders emphasizes that proactive planning is crucial for accessing government funding. “These applications require considerable time,” Borders explained. “Receiving an award means approximately a year of dedicated effort. [Our grant] reflects our planning efforts from about a year prior.”

These grants are typically structured around milestones, providing BadVR with assurance of funding as long as it continues to meet its objectives.

“NSF is dedicated to supporting the technologies of the future by investing in innovative and impactful ideas across all fields of science and engineering,” said Andrea Belz, Division Director of the Division of  Industrial Innovation and Partnerships at NSF. “Our research funds empower deep technology startups and small businesses to translate fundamental science into practical  solutions that address critical needs.”  

The company is also participating in other government competitions, which provide additional non-dilutive funding and opportunities to evaluate new capabilities.

This has led to progress with the company’s Augmented Reality Operations Center, a new product offering that visualizes data for first responders. Through a challenge organized by the National Institute of Standards and Technology, BadVR collaborated with the Eureka, Missouri Fire Department to create a prototype for a specific emergency scenario.

This builds upon an earlier product that allowed businesses to create virtual reality digital twins of their facilities—factories or stores—for immersive walkthroughs and condition assessments.

BadVR’s visualization capabilities extend beyond geospatial data; the company can integrate various data types into environments that simplify data interpretation. Borders envisions the company’s services expanding to encompass collaborative environments for businesses.

“The system emphasizes key areas requiring attention,” Borders said. “It transforms the data visualization experience into an immersive environment—and fosters a more collaborative approach.”

The COVID-19 pandemic has increased the demand for the types of products BadVR is developing—with the support of government funding—according to Borders.

“This increase is due to the growing need for remote collaboration tools,” Borders stated. “We’ve seen heightened interest across the board—particularly in tools that facilitate remote collaboration and bring people together in a shared, immersive data experience… these are gaining momentum.”